1. G.O.Ms.No.39, Energy (Res) Deptt., dated 26.09.2012

2. G.O.Ms.No.44, Energy (Res) Deptt., dated 16.11.2012.3. From the VC&MD, NREDCAP, Hyderabad Lr.No.NREDCAP / SolarPolicy 2014/2013-14, dated 25.09.2014.****ORDER:In order to promote Solar Power Projects, the Government of AndhraPradesh have issued orders formulating Andhra Pradesh Solar PowerPolicy, 2012 vide references 1st and 2nd read above. Under the policy,34.85 MW capacity solar power projects were only commissioned before 30thJune, 2014 though it was envisaged to add 2000 MW capacity by the Group ofMinisters constituted for the purpose of promotion of Renewable Energy. Thispolicy is applicable up to the year 2017 and the incentives were applicable onlyfor the projects commissioned up to 30th June, 2014. Further, due to bifurcationof the State, it is felt necessary to come out with a new comprehensive policy forpromotion of solar power to meet the demand for power in an environmentallysustainable manner.2.Government, after detailed discussions on the proposal vide reference 3rdcited, with various stake holders viz., APTRANSCO, APDISCOMS, NREDCAPSolar Power Developers & Solar Manufacturers Association hereby issue theAndhra Pradesh Power Policy, 2015 as mentioned below:

ANDHRA PRADESH SOLAR POWER POLICY - 2015

PREAMBLEIndia is blessed with abundant sunshine and solar power is expected to play acritical role in meeting the energy needs of the country in the long run. Solarpower projects can be setup in a much shorter timeframe when compared toconventional power projects and the cost of solar power has become moreeconomical today. Solar power can also help meet energy requirements for bothgrid connected as well as off-grid applications such as solar powered agriculturalpumpsets.Andhra Pradesh is poised for rapid industrial growth driven by infrastructureinvestments and has also been selected by Ministry of Power as one of the pilotstates for implementation of the 24X7 Power for All (PFA) scheme. Solarenergy can become an important source in meeting the growing powerrequirements of the State.AP has large agriculture consumption constituting around 24% of the total energyconsumption of the State. Solar power can also help shift the agriculture loadand meet the power demand during the day time.

Contd2

2The State government is keen to tap the immense solar potential and promotethis clean source of energy to meet the rising energy requirements of the State.The following factors make Andhra Pradesh an ideal location for setting up SolarPower Projects:

Availability of about 300 sunny days in a year with solar insolation of morethan 5 kWh/m/day.

Amongst the best performing power distributing companies in India

(APEPDCL and APSPDCL).

An efficient and strong evacuation infrastructure that can facilitate

distributed generation.

The Government of Andhra Pradesh had earlier issued the Andhra PradeshSolar Power Policy 2012 vide G.O.Ms.No.39 dated 26.09.2012 and G.O.MsNo.44 dated 16.11.2012 to promote solar power generation in the State.Accordingly, the incentives under the Solar Policy were available for Solar PowerProjects commissioned before 30.06.2014.To meet the twin objectives of energy security and clean energy considerations,the GoAP has felt it necessary to come out with a new policy for solar power. Thepolicy aims to promote widespread usage of solar power and to meet thefollowing objectives.OBJECTIVES:1 To target a minimum total solar power capacity addition of 5,000 MW in thenext five years in the State with a view to meet the growing demand for powerin an environmentally sustainable manner.2 To develop solar park(s) with the necessary utility infrastructure facilities toencourage developers to set up solar power projects in the State.3 To promote distributed generation that can help in avoiding upstream networkcost and contribute towards loss reduction.4 To deploy solar powered agricultural pumpsets and meet power requirementsof farmers during day time.5 To promote local manufacturing facilities which will Generate employment inthe State.1. Operative PeriodThis policy shall come into operation with effect from the date of issuance andshall remain applicable for a period of five (5) years and/ or shall remain in forcetill such time a new policy is issued.Solar Power Projects (SPP) that are commissioned during the operative periodshall be eligible for the incentives declared under this policy, for a period of ten(10) years from the date of commissioning - unless otherwise the period isspecifically mentioned for any incentive.

Contd 3

-- 3 -2. Eligible Developers

All registered companies, Government entities, partnership companies/ firms,individuals and all consumers of APDiscom(s) will be eligible for setting up ofSolar Power Projects within the State for sale of electricity/captive use, inaccordance with the Electricity Act-2003, as amended from time to time. Theentity desiring to set up Solar Power Project shall intimate the Nodal Agency asper the para (5) of this policy.3. Solar Power ProjectsA. Sale of power to AP Discom(s)

The government will promote setting up of Solar Power Projects for sale ofpower to APDiscoms. It is envisaged that the Discoms would procure around2,000 MW of solar power capacity in a phased manner within the next five (5)years. The Discoms would enter into long term PPA of 25 years with developerswho are selected based on a competitive procurement process.B. Third party sale / Captive use

The government will encourage solar power producers to set up Solar PowerProjects for captive use within the State or third party sale within and outside theState of Andhra Pradesh. These projects will also qualify for Renewable EnergyCertificates (RECs) subject to applicable regulations/ guidelines issued by theappropriate commission.C. Solar Parks

The Govt. of A.P will develop Solar Parks with capacity additions of around2,500 MW in the next five (5) years to promote Solar Power Projectsdevelopment in clusters of 500-1000 hectares. The State Government, underthis policy, will help facilitate in building up the necessary infrastructure likepower evacuation, water requirements and internal roads.Solar Park shall consist of various zones viz. Solar Power Projects,Manufacturing Zones, R & D and Training Centres. The State will extend allfacilities and fiscal incentives provided by Central Government/ National SolarMission to the manufacturers in Solar Parks.Special Purpose Vehicle(s) (SPVs) will be established for development ofinfrastructure and management of Solar Park. The SPV will formulate Policy andRules in respect of land allotment, sharing of development cost by the solarpower producers and manufacturers. The SPV will develop the initialinfrastructure from the funds allocated by GoI and GoAP, which will besubsequently recovered from the solar power producers whose projects arelocated in Solar Parks by levying development charges.D. Solar Rooftop Projects Gross/Net Metering

The Government will promote solar rooftop systems on public buildings,

domestic, commercial and industrial establishments on gross and or net meterbasis. The consumer(s) are free to choose either net or gross meter option forsale of power to Discom under this policy. The applicable tariff for either of thecases shall be equal to the average cost to serve of the Discom which will bedetermined by APERC every year. For example, the average cost to serveapproved by APERC for FY 2013-14 is Rs 5.25 per unit. This facility shall beextended for a period of 25 years for Eligible Developers who set up solar rooftopprojects within the Operating Period of this policy.Contd4

-- 4 -The metering facility will be extended for all Eligible Developers who intend toset-up solar photovoltaic plants at their premises. Eligible Developers who wishto avail the metering facility will have to apply through online mode to theDiscoms either on their websites and/or through designated mee seva /customer service centres. All approvals/clearances shall be disposed by therespective Discom within 14 days from the date of applicationThe projects of capacity upto 1000 KWp at a single location will be permitted.Permission will be given to the group of persons/societies to set up Solar PowerProjects and will be treated as collective generation for supply of power to thehouseholds of each society /group member. The DISCOMs will deduct the aboveenergy from the consumed energy of individual service connections andbalances (either excess or lower) can be billed on net metering basis. NoDistribution losses and charges will be collected from the Group/Society/individuals by the DISCOMs.Eligible Developers are allowed to avail the relevant subsidies and incentivesfrom MNRE under JNNSM scheme. The eligible subsidy for net meteringsystems may be processed through NREDCAP (Nodal agency) or ChannelPartners of MNRE, GOI. The sanction and release of the subsidy will be as perthe guidelines issued by MNRE from time to time.The modalities for implementing the rooftop policy including metering, billing,settlement, payment(s) and technical aspects etc. shall be issued by APEPDCLwithin 30 days from the date of issue of this policy, which would be followed by allDISCOMS in the State.E. Solar pumpsets

TheStategovernmentincollaborationwiththeCentralGovt/MNRE/MOP/Multilateral agencies will undertake measures to enablegradual replacement of conventional pumpsets to solar powered pumpsetsthrough subsidy support. Nodal agency will facilitate with government agenciesfor availing subsidies, grants and/ or incentives on behalf of APDiscoms.It is envisaged that 50,000 solar powered pumpsets will be operational in theState in the next five years without any additional financial burden on thefarmers. The modalities of the scheme will be developed in consultation with allthe stakeholders within 30 days from the date of issue of this policy.4. Incentives from the State GovernmentTo enable solar power capacity addition in the State, following incentives shall beprovided for Eligible Developers for those projects setting-up during the operativeperiod mentioned in the para one (1).a) Transmission and Distribution charges for wheeling of powerTransmission and Distribution charges shall be exempted for wheeling ofpower generated from Solar Power Projects for only captive use/thirdparty sale within the State.b) Distribution LossesDistribution losses shall be exempted only for Solar Power Projectsinjecting at 33 kV or below irrespective of voltage-level of the deliverypoint within the Discom.Contd 5

-- 5 -c) Energy Banking

Banking of 100% of energy shall be permitted for all Captive and OpenAccess/ Scheduled Consumers during all 12 months of the year. Bankingcharges shall be adjusted in kind @ 2% of the energy delivered at thepoint of drawal. The banking year shall be from April to March.Drawals from banked energy shall not be permitted during five (5) monthperiod from 1st April to 30th June and 1st February to 31st March of eachfinancial year. In addition, drawls of banked energy during the Time of theDay (ToD) applicable during the peak hours, as specified in the respectiveRetail Supply Tariff Order, shall also not be permitted throughout the year.However, the provisions on banking pertaining to drawal restrictions shallbe reviewed based on the power supply position in the State.Energy injected into the grid from date of synchronization to CommercialOperation Date (COD) will be considered as deemed energy banking.The unutilized banked energy shall be considered as deemed purchase byDiscom(s) at the pooled power purchase cost as determined by theAPERC for the applicable year. Energy settlement shall be done onmonthly basis.d) Open AccessIntra-state Open Access clearance for the whole tenure of the project or25 years whichever is earlier will be granted as per the APERCRegulations amended from time to time. In absence of any response orintimation from the Nodal Agency to the generator within 21 days, thensuch application shall be considered to be deemed open access.e) Electricity DutyElectricity duty shall be exempted for captive consumption, sale toDiscom(s) and third party sale provided the source of power is from SolarPower Projects setup within the State.f) Cross Subsidy SurchargeCross subsidy surcharge shall be exempted for third party sale providedthe source of power is from Solar Power Projects setup within the State fora period of five (5) years from the date of commissioning of the SPP.g) Contract DemandScheduled Consumers shall avail reduction in Contract Demand for aperiod of five (5) years from the date of commissioning of the project.Scheduled consumers shall have the same meaning as defined inBalancing and Settlement Code regulations issued by APERC andamended from time to time. The demand credit shall be computed basedon the average solar power consumption during hourly time blockperiod(s). An illustration is shown below:

Solar power consumption in a month (kVAh) = 1000

Hourly time-blocks in a month (hours) = 24X30 = 720

Applicable demand credit = 1000/720 = 1.38 (kW)

Contd . 6 .

-- 6 -h) Renewable Energy Certificate (REC)

All projects developed with the above incentives will be eligible for RECbenefits subject to applicable regulations/orders of the appropriatecommission. Deemed injection into the grid for in-house/co-located solargeneration will also be eligible for REC benefits subject to applicableguidelines.i) Grid Connectivity and Evacuation facilityThe power generated from a Solar Power Project shall be injected at anappropriate voltage at the sub-station and/or interconnection point of theAPTransco / Discom(s). The Eligible Developer shall bear the entire costof construction of power evacuation facilities from the project upto theinterconnection point and/or upto APTransco / Discom(s) substation.The Eligible Developer shall abide by the orders, rules, regulations andterms and conditions as approved by the Commission from time to time foroperation of Solar Power Projects, power evacuation, transmission andwheeling of energy. Solar Power Projects will be exempted from payingthe Supervision charges to APTransco/Discom(s) towards the internalevacuation infrastructure within the project site and upto interconnectionpoint.APTransco /Discom(s) will dispose the proposals for the technicalfeasibility for evacuation within 14 days from the date of receipt ofapplication. Any upstream system strengthening requirement shall beborne by APTransco/ Discom(s) on a priority basis.j) Deemed Industry StatusGeneration of electricity from Solar Power Projects shall be treated aseligible industry under the schemes administered by the IndustriesDepartment and incentives available to industrial units under suchschemes shall be available to the solar power producers.k) Deemed Public Private Partnership (PPP) StatusDeemed PPP status shall be provided for projects coming up undercategory (A) as per para (3) of this policy.l) Non Agriculture StatusDeemed Non-Agricultural (NA) status for the land where Solar PowerProjects will be accorded, on payment of applicable statutory fees.m) Must run statusInjection from Solar Power Projects shall be considered to be deemedscheduled.Contd.7

-- 7 -n) LandIt is the responsibility of the project developer to acquire the land requiredfor the project. However, in case of land owned by Revenue Department,the land allotment shall be done as per the prevailing government policy.o) Pollution ClearanceSolar PV power projects will be exempted from obtaining anyNOC/Consent for establishment under pollution control laws from APPollution Control Board.5. Nodal AgencyNew and Renewable Energy Development Corporation of A.P. Ltd (NREDCAP)shall act as a Nodal Agency under this policy and as decided by the governmentfrom time to time.The Nodal Agency and/or designated offices by the Nodal Agency shall beresponsible for the following activities:a) Facilitate in obtaining revenue land wherever is required.b) Facilitate in getting power evacuation and/ or Open Access as per theregulation issued by APERC and amended from time to time.c) Facilitate water allocation from concerned departments.d) Facilitate and process of proposals for availing subsidy for solar rooftopsystems as per MNRE guidelines.e) Co-ordinate with MNRE/SECI/APTransco/Discom(s) and any otherCentral/State agencies in obtaining necessary clearances, approvals,grants and subsidies.An online system will be established by the Nodal Agency for acceptance ofapplications and for providing status updates. The developers will be given alogin access for tracking the status updates. All approvals/clearances shall bedisposed within 30 days from the date of registration.The modalities for operating the single window clearance mechanism shall bedeveloped within 30 days from the date of issue of this policy.6. Administrative approvalThe applications received from the Eligible Developers as per the provisions ofthis policy should be in the prescribed format along with a registration fee ofRs.1000 for capacities upto 5 KWp; Rs. 5,000 for capacities above 5 KWp to 100KWp; Rs,10,000 for capacities above 100 KWp to 1000KWp and Rs.10,000 perMW for capacities more than 1000 KWp.In addition, a facilitation fees of Rs 25 per kW shall be applicable for the EligibleDeveloper who seeks assistance from the Nodal Agency for obtaining singlewindow clearance support as per the above para.

2012A onetime opportunity will be extended to all Solar Power Project Developersother than those who have already signed PPAs and registered under AP SolarPower Policy 2012 and not commissioned before 30th June, 2014 to migrate tothe new Policy. Such developers shall register with the nodal agency within twomonths from the date of notification of the new policy.

Project Monitoring Committee

A High Level Committee constituted with the following members will monitor theprogress of implementation of the Solar Power Projects cleared under the policy:1. Secretary, Energy Department2. Chairman and Managing Director, APTransco3. CMD of APDiscom(s)4. VC & MD, NREDCAP( Member-Convener)5. Representative of FAPCCI/CII6. Representatives (2) of solar power developersIf any difficulty arises in giving effect to this policy, the High Level Committee isauthorized to issue clarification as well as interpretation to such provisions, asmay appear to be necessary for removing the difficultly either on its own motionor after hearing those parties who have represented.

Solar Manufacturing

The government intends to promote solar manufacturing facility that can helpdevelop the solar eco-system and support job creation potential in the State.The following incentives shall be applicable for new manufacturing facilities andequipments, ancillaries related to Solar Power Projects only.

Priority allotment of government land in solar parks on long term lease basis

Exemption from electricity duty for a period of ten (10) years

10

Mid-Term Review

State Govt. may undertake a mid-term review of this policy after a period of twoyears or as and when need arises in view of any technological breakthrough or toremove any inconsistency with Electricity Act 2003, rules and regulations madethere under or any Govt. of India policy.Contd .. . 9.

-- 9 -11

Power to remove difficulties

If any difficulty arises in giving effect to this policy, energy department is

authorized to issue clarification as well as interpretation to such provisions, asmay appear to be necessary for removing the difficulty either on its own motionor after hearing those parties who have represented for change in any provision.(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)AJAY JAINSECRETARY TO GOVERNMENT